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NLRB upholds Emanuel’s disqualification from participation in Hy-Brand II

By Ronald Miller, J.D.

Finding that an employer had not identified any material error or extraordinary circumstances warranting reconsideration under Section 102.48(d)(1) of the Board’s Rules and Regulations, a four-member panel of the NLRB denied its motion for reconsideration of Hy-Brand II, 366 NLRB No. 26. The Board rejected challenges by the employer and General Counsel to the determination by the NLRB’s Designated Agency Ethics Official (DAEO) that Member Emanuel was disqualified from participating in the case. Chairman Ring and Member Kaplan filed a concurring opinion. Members Pearce and McFerran filed a separate concurring opinion. Member Emanuel was disqualified from participating in this case (Hy-Brand Industrial Contractors, Ltd., June 6, 2018).

Disqualification. On February 26, 2018, the NLRB vacated an order granting a motion for reconsideration in Hy-Brand II, 366 NLRB No. 26. The move came after the DAEO determined that Board member William Emanuel was disqualified from participating in the case and should have recused himself from the proceeding. That order partially granted a motion for reconsideration by the charging parties and vacated the Board’s decision in Hy-Brand I, 365 NLRB No. 156, in which a 3-2 Board overturned the agency’s controversial “joint employer” ruling in Browning-Ferris Industries.

The employer filed a motion for reconsideration of Hy-Brand II. The General Counsel filed a response to the employer’s motion, agreeing that Hy-Brand II should be set aside. The employer contended that the Board failed to comply with the Government in the Sunshine Act in connection with Hy-Brand II. Finding that the Board issued a timely and proper Sunshine Act notice, it was concluded that the contention was mistaken.

The Board found the employer was also mistaken in its contention that the delegation of authority to a three-member panel in Hy-Brand II was invalid because Member Emanuel did not participate in the delegation. As the Board explained in Hy-Brand II, an ethics official had determined that Member Emanuel was and, and should have been disqualified from participating in this proceeding. The Board noted that 5 C.F.R. § 2635.502(c) gives the agency’s ethics official authority to “make an independent determination as to whether a reasonable person with knowledge of the relevant facts would be likely to question the employee’s impartiality in the matter.” Based on that authority, the DAEO issued a determination of disqualification.

Delegation of authority. Next, the Board considered the employer’s contention that Member Emanuel should have nonetheless participated in the delegation of authority to a three-member panel. As to then-Chairman Pearce’s recusal of himself but participation in the delegation of authority to the panel in an unpublished order in New Vista Nursing & Rehabilitation, he did so in the New Vista order itself. Here, Member Emanuel had been disqualified from participating in Hy-Brand by the agency official vested with regulatory authority to do so, and this disqualification occurred before the Board issued Hy-Brand II.

Concurrence. In a concurring opinion, Chairman Ring and Member Kaplan observed that in carrying out its work, the Board must not only adhere to exacting standards of integrity and impartiality, but that the public must also perceive the agency as adhering to such standards. Here, the DAEO invoked regulatory authority and expressly forbid the Board from allowing Member Emanuel to participate in this case. When the DAEO took the unprecedented step of disqualifying Member Emanuel from participating in Hy-Brand II (and subsequent proceedings in the case), the Board had no alternative but to comply with the directive. To do otherwise would have meant protracted legal challenges, and lasting injury to the Board’s reputation.

In a separate concurring opinion, Members Pearce and McFerran expressed dismay at the General Counsel’s decision to attack the Board’s reliance on a disqualification determination of the DAEO. They observed that while the General Counsel’s duty would presumably be to defend the interest of seven discharged employees whose rights were allegedly violated, instead the General Counsel’s belated participation in the litigation inexplicably focused on questioning the authority of the DAEO. They concluded that it was beyond question that the DAEO had independent authority to disqualify Member Emanuel.